Government tightens asset-backed pension contribution rules
PricewaterhouseCoopers says changes to HMRC rules on asset-backed pension contributions will force schemes to revisit previously agreed funding deals.
In November last year the Government tightened rules around the arrangements, which involve a pension scheme using assets to help plug deficits.
PwC says revised rules announced today reduce the types of arrangements that will be eligible for tax relief.
PwC tax partner Alex Henderson says: “The rules released on November 29 have been tightened to ensure the Government doesn’t provide up front relief where the scheme might not ultimately receive value.
“Under the revised rules, there’s still plenty of scope for a wide range of companies to use asset backed arrangements, providing there’s a fixed agreement to pay annual amounts into the scheme. There’s scope to spread payments and companies can also stop payments if the scheme goes into surplus, so asset backed pension contributions can still be a viable and attractive option for an increasing number of organisations.
“But the changes announced today will reduce flexibility for the future and companies with arrangements in progress will need to review the new rules urgently to see how they are affected.”